Credit card laws change today (Audio)

Officials say relief has arrived for credit card users. It’s part of President Obama’s Credit Card Act passed last year.

Brandolyn Pinkston, director of the South Carolina Department of Consumer Affairs says that the change affects retroactive interest rate increases for late payments and other reasons. Pinkston says it means that cards can no longer use the contract clause “rates are subject to change at any time for any reason.”

As of Monday, rules make it harder for card companies to blanket college campuses to promote their product, and for students to prove they’re worthy of credit.

Pinkston says there is now a ban on “universal default” clauses.

It puts an end to penalties on consumers who are late on other credit card payments. That Universal default clause, usually buried in your contract, said if you were late on any card that your interest rate could shoot up. And your credit score would be damaged.

If a credit card company changes their agreement with you, you have the right to opt out and pay off the card under existing terms, but credit advisers say that will likely damage your credit score.

Pinkston says the Credit Card Act mandates consistent payment dates. Now bills must be mailed 21 days before the due date. Previously that was set at 14 days.

Pinkston says another big change is that consumers will now have to give their permission to allow transactions over their credit limit, which have traditionally been connected to resulting penalty fees.

There are now restrictions on sub-prime cards, which do away with big upfront fees.